Layout Redesign and Automation for a Lean Packing Process in a Distribution Center

Sammanfattning: Background: Warehouses serve an important role in many supply chains as they can affect business competitiveness in terms of both costs and customer service. However, the cost of operating a warehouse is often high due to the presence of many non-value adding activities. Lean is a philosophy that can be used to eliminate waste and enable cost reductions in companies. By implementing Lean warehousing and eliminating waste from warehouse activities, a firm’s distribution capabilities can be significantly enhanced. Warehouse automation can cut waste and hence be used in Lean initiatives. By automating processes, several sources of waste that take place in a warehouse can be eliminated. One of the warehouse processes most likely to be highly automated in the next coming years includes the packing process. Purpose: The purpose of the master thesis is to identify waste and the corresponding root causes in the existing packing processes at AL DC Tumba and investigate how warehouse automation could be used for waste removal in developing a new packing area layout. Research Questions: The two following research questions are formulated: RQ1: Where in the packing process does waste occur and what are the root causes? RQ2: How can the packing process be redesigned for waste elimination by implementing warehouse automation and a new packing area layout? Methodology: To answer the research questions, a single-case study is performed. Primary data is gathered through observations and interviews. Two time studies are conducted to estimate the impact that waste has on the time of order packing. A proposed framework for Lean Warehousing is applied, using a combination of Lean tools such as the 5Ws, 5S and VSM. Secondary data is also collected from the case company’s ERP system and the analysis of it builds an important foundation in proposing the design of a new layout. Conclusions: From observations, 40 wastes are identified and classified, of which 21 of them are directly or indirectly caused by the design of the packing area layout and therefore analyzed further. A layout that reduces or eliminates the 21 wastes is developed, and is estimated to reduce the packing process time by 42 percent, hence providing savings of 13,1 packing hours per day. The layout is based on a goods-to-man system that suggests dividing the packing process into three different flows and using a conveyor system to eliminate travel. Considering a growth of 20 percent, the dimensions of a new consolidation area are determined and the total number of packing stations is found to be six. The required lengths of the conveyors alongside each packing station are estimated. Recommendations for suitable locations for each section of the packing area are provided.